Of all the places Floyd Leroy Craig could have called home, this was perhaps the worst.

He's
a registered sex offender, convicted of murdering his first wife in the
1970s and fondling a 12-year-old girl in 2004. He refused to go to sex
offender treatment programs, skipped out on paying fees and ignored
orders to get a polygraph test, state records show.

And on April 20, 2011, probation and parole officers found him living in a home where his current wife was operating a day care.

Craig
is one example of probation and parole officers ignoring sex offenders'
repeat violations of their supervision rules. A blistering audit of Tennessee's parole and probation system, released earlier this month, cited other instances where officers ignored GPS alerts on sex offenders.

Officers
also fell behind on basic tasks like checking out the addresses
offenders provided, visiting them at home and making sure they were
given drug tests, it said.

Some sex offenders have found easy access to children while supposedly under state supervision.

"We're
talking about children or women - some of the most vulnerable members
of our society - who we are putting at risk if we're not paying
attention," said Assistant District Attorney Kristen Menke, who works
in Davidson County's Child Physical and Sexual Abuse Unit. "It's very
important to monitor these people very closely, because we're trying to
prevent repeat offenders."

The
task of supervising offenders on parole and probation was transferred
from the Board of Parole to the Tennessee Department of Correction
earlier this year. Correction Commissioner Derrick Schofield, in
response to the audit, has begun a full investigation into the findings,
including allegations parole officers claimed to be supervising felons
who turned out to be dead.

"The Department of Correction is committed to enhancing public safety," said Dorinda Carter, spokeswoman for the agency.

Legislators
say they expect big things from Schofield and in a short amount of
time. They've given the state a year to put fixes in place before
another audit begins.

"Tennesseans should be shocked, appalled and
dismayed and quite frankly mad about it. I know I am," said Rep.
Barrett Rich, R-Somerville. "I've had no confidence in that agency until
Commissioner Schofield took that over."

The stakes are high.

"These
are people that absolutely must be closely monitored, and they never
should have unsupervised contact," said June Turner, executive director
of the advocacy group Nashville Children's Alliance. "When children have
been victims of abuse, they are more likely ... to experience physical
health problems, depressive disorders as adults, post-traumatic stress
disorder symptoms.

"Children are not going to forget it."

GPS alerts ignored

Auditors looked at several aspects of supervision, including how well
some sex offenders were tracked on GPS. The state began monitoring some
of its most dangerous offenders by GPS in 2005.

Today, about 800 felons statewide - most of them sex offenders - are supposed to be monitored daily by GPS.

But
auditors found that parole and probation officers were not "clearing"
alerts they received from their third-party GPS monitoring system -
checking where the sex offender is or whether he or she is tampering
with the GPS monitor and confirming it in the system. For example, they
found that officers cleared only about 18 percent of alerts triggered by
sex offenders' GPS units going into an area they were prohibited from
entering, such as a school zone.

Auditors found that officers
missed home visits in nearly 40 percent of the cases they audited,
didn't make sex offenders get drug tests in almost half of the cases and
failed to ensure sex offenders were going to treatment in 40 percent of
the cases.

That last point should give citizens pause, said Menke, the Nashville prosecutor.

"Sex
offender treatment is one of those things I think you cannot make
mistakes on," she said. "Every sex offender who is required... needs to be
doing it. In my opinion, that's more important than GPS."

When
everything goes right, children can be protected or rescued from
dangerous situations, such as in the case of sex offender Christopher
Federico.

In 2010, his parole officers noticed through GPS that he
was living near a daycare in Nashville. They followed up when he failed
to attend his sex offender treatment program or pay his state
supervision fees and skipped out on polygraph tests he was supposed to
take.

That triggered a home visit on July 26, 2010. Parole officers found two children sobbing in a crawlspace.

Authorities
rescued the children - one of whom was Federico's original victim.
Federico was convicted of violating his sex offender provisions and will
spend at least the next year in prison.

Carter said the
department has ordered that every parole officer must make face-to-face
contact with all sex offenders by the end of October.

Caseload adjusted

The Board of Parole's goal was 25 sex offender cases as the ideal
maximum load for parole officers. Tennessee's officers handle an average
of 40 sex offender cases, which the audit said can contribute to
problems with oversight.

A footnote in a report written after
Craig was found living at the daycare noted, "Sex Offender Unit has had
inadequate officer staffing since (December) 2008 and Craig's case has
been passed on to new hires who don't seem to stay with the agency long
enough to completely address compliance issues in the files."

Similarly, a 2009 note in Federico's case file warned, "Unable to complete home visit due to time restraints and caseload size."

Sarah
Davis, another Nashville prosecutor, said that many of the problems
appear to come down to budgeting - an excuse she said should appall
Tennesseans.

"They should be outraged, because that's part of not
just the Board of Probation and Parole but also our responsibility in
the state in supervising these citizens and making sure they're
rehabilitated," she said. "They should be writing their representatives
or their congressmen."

Parole visit standards

While supervising sex offenders, Tennessee's probation and parole
officers are supposed to include visits, testing and check for new
arrests.